Part 9/11:
Ackman warns that the ongoing uncertainty is likely to increase the cost of capital for small and medium-sized businesses, which are vital to economic growth. Heightened risk perception could lead to higher lending costs, stifling economic activity and innovation.
The Federal Reserve and Future Rate Hikes
The bond market’s response indicates that some participants believe the Federal Reserve’s rate cycle may be nearing its end. The decline in the two-year and ten-year Treasury yields suggests a perception that rate hikes might stop, or even reverse, to prevent further destabilization. If this occurs, it could be bullish for equities like Tesla, which experienced a brief downturn but then recovered, signaling market anticipation of relief.